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Consumer Trends in Automotive Industry
Amity Business School, Noida 
Driving through consumer’s mind 
Considerations For Car Purchase 
By 
KB SURAJ 
KANNAN 
KAJAL 
SAKSHAM
ABOUT THE STUDY 
• To identify the drivers for the new vehicle 
PURCHASE DRIVERS purchase decision 
• To identify how many are considered by 
CONSIDERATION SET consumers for vehicle purchase 
• To understand the perception of different 
brands and 
• To identify the key attributes that consumers 
look in vehicle before they purchase 
BRAND PERCEPTION
PURCHASE DRIVERS 
Top reasons for vehicle purchase: 
 Satisfy family needs 
 New technology available 
 Need larger vehicle/ more space 
 Afford to buy 
 Improve fuel efficiency 
 Improve reliability 
 Purchase vehicle with a better brand
For first time buyers: 
• In case of first time buyers the study found that 
satisfying Family needs is the major motive in 
purchasing a new car and where as Branding 
stood last. 
• Same kind of results were seen in case of Gen 
X and Gen Y categories have expressed similar 
requirements for their first car
For repeat buyers: 
• Sophistication is major motive for re-purchase. 
• Factors such as New technology and Larger space proved 
to be driving forces for purchasing against Branding. 
• In case of Gen X and Gen Y categories, the former one 
preferred for larger car space and latter one preferred 
technology upgrade as a driving force for re-purchase of 
cars. 
• Time between the first and second time purchase is 
around 6-7 years after having travelled for 50-55k 
kilometers.
Mapping the consumer mindset 
• Sophistication is major motive for re-purchase. 
• 3-5 brands mostly considered by buyers, both first time 
and repeaters. 
• The trend seems to hold line even during periods of 
economic recession, and during peak growth periods 
• This can be attributed to the typical Indian mindset of 
exploring all possible options before finalizing on one. 
• SUV customers lookout for more options when compared 
to hatchback and sedan buyers. This can be attributed to 
the launch of Crossovers and Mini SUV’s.
Buying trends across the segment 
• Indian automobile customers go through repeat 
purchase, as such they do not behave any differently 
than a first time buyer. 
• This can be attributed to the change in innovation and 
technology over a period of 4-5 years by the time 
when they change their cars. 
• Not much brand loyalty is displayed, and customers 
tend to browse as many as 6-7 cars across 3-4 brands 
before finalizing one 
• The number of alternatives considered remains the 
same for non-luxury and luxury cars
Rural Vs Urban 
• Indian automobile customers go through repeat 
purchase, as such they do not behave any 
differently than a first time buyer. 
•Rural customers tend to opt for lesser number of 
options, when compared to the urban market. 
•Rural market still has issues with several 
parameters like point of service location and 
rugged roads. Many cars cannot handle that 
toughness. 
•A brand like Mahindra heavily caches in on that 
factor
Rural Vs Urban
Choice of Rural Market 
• From the sales chart, it is clear that the 18 year 
old Bolero is giving a tough time to all the new 
entrants 
• All the factors discussed prior gave the 
Mahindra product a massive edge over other 
brands when it came to conquering the rural 
market.
That would be my bolero 
Urban Market examined 
• When it comes to urban buyers, an over 
whelming number of the buyers, of late seem 
to follow a trend of sticking to one brand 
• Brand loyalty, support of OEM’s , buy back 
options and most importantly easy financing 
options made available to the clients who are 
repeat buyers, by the company itself is one of 
the core reasons behind this paradigm shift.
Gen X- Gen Y trends 
• Urbanized Gen X buyers, owning a premium 
hatchback, or an A3- sedan, costing between 6- 
8 lakhs seems to be more experimenting with 
the brands 
• A sizable 40 percent of them seems to have 
considered more than 6 cars prior to purchase 
• In contrast, less than 20 percent of the Gen Y 
population has considered that many cars 
before purchase
This is the market ecosport targets
BRAND PERCEPTION 
Key Influencers 
• Consumers considered a number of brands but 
ended up making purchase from among 3-5 
brands. 
• Looking on the brands considered by existing 
car owners, we can see that SUV owners have 
considered more number of brands as 
compared to van/minivan owners.
Last Purchase Consideration By 
Vehicle Type 
• There are a number of factors that changes the 
initial plan of the consumers, there is a shift 
from what they initially considered and what 
they finally selected. 
• As there is only 13% people changing the 
considered model based upon price of the 
vehicle, which further intensifies the view that 
Indian consumers is price driven.
Factors That Changes Initial Plan
Last Purchase Consideration By Car 
Value 
• Based upon the responses, it was figured out 
that about 40% of consumers have considered 
only 3-4 brands from 2-12lakhs value segment. 
• Consumers have considered more number of 
brands while making a purchase at high price 
points.
• Based upon the owners rating for their 
respective brands, maximum owners have 
rated there brands high in brand reputation and 
performance and handling followed by overall 
quality and safety. 
• Least points were given to the fuel efficiency 
and resale value. But as they are happy with 
what they have.
CONCLUSION 
• The Indian car buyer 
comes across as a very 
rational person during 
the entire process, 
contrary to the popular 
notion of car buying 
being a very………..... 
emotional activity.
• There are very practical reasons to buy a car - 
space, need of the family or to upgrade to a 
higher quality of vehicle. Once the need for a 
car is established, the buyer looks for quality 
of service, product reliability and re-sale value. 
• Given the factors, the potential buyer looks at 
several products, presumably at the same price 
point, and tends to make the final selection. 
This appears to be a deliberate and a detailed 
process.
The lessons for the OEMs 
• It helps to appeal the rational side of the buyer. 
• While the brand itself and the perceptions 
around it are important, the buyer looks at the 
quality of the dealership for service, vehicle 
reliability and resale value to shortlist the 
brands. 
• The chance of almost all brands to get into the 
consideration of a buyer seems bright.
• Consumers not complaining should not to be 
misunderstood to mean satisfaction and brand 
loyalty! Most of the consumers would tend to 
look at all possible options before making the 
next buying decision, at least, at the present 
moment. 
• While only a very small number of customers 
seem to be loyal to a brand, the population, 
however, seems to be growing. This would, 
therefore, suggest a need to revisit loyalty 
programs to make the ownership experience 
compelling.
Consumer Trends in Automotive Industry
Consumer Trends in Automotive Industry

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Reinventing the Car - as I reported it in 1985!Reinventing the Car - as I reported it in 1985!
Reinventing the Car - as I reported it in 1985!
 

Consumer Trends in Automotive Industry

  • 2. Amity Business School, Noida Driving through consumer’s mind Considerations For Car Purchase By KB SURAJ KANNAN KAJAL SAKSHAM
  • 3. ABOUT THE STUDY • To identify the drivers for the new vehicle PURCHASE DRIVERS purchase decision • To identify how many are considered by CONSIDERATION SET consumers for vehicle purchase • To understand the perception of different brands and • To identify the key attributes that consumers look in vehicle before they purchase BRAND PERCEPTION
  • 4. PURCHASE DRIVERS Top reasons for vehicle purchase:  Satisfy family needs  New technology available  Need larger vehicle/ more space  Afford to buy  Improve fuel efficiency  Improve reliability  Purchase vehicle with a better brand
  • 5. For first time buyers: • In case of first time buyers the study found that satisfying Family needs is the major motive in purchasing a new car and where as Branding stood last. • Same kind of results were seen in case of Gen X and Gen Y categories have expressed similar requirements for their first car
  • 6. For repeat buyers: • Sophistication is major motive for re-purchase. • Factors such as New technology and Larger space proved to be driving forces for purchasing against Branding. • In case of Gen X and Gen Y categories, the former one preferred for larger car space and latter one preferred technology upgrade as a driving force for re-purchase of cars. • Time between the first and second time purchase is around 6-7 years after having travelled for 50-55k kilometers.
  • 7. Mapping the consumer mindset • Sophistication is major motive for re-purchase. • 3-5 brands mostly considered by buyers, both first time and repeaters. • The trend seems to hold line even during periods of economic recession, and during peak growth periods • This can be attributed to the typical Indian mindset of exploring all possible options before finalizing on one. • SUV customers lookout for more options when compared to hatchback and sedan buyers. This can be attributed to the launch of Crossovers and Mini SUV’s.
  • 8. Buying trends across the segment • Indian automobile customers go through repeat purchase, as such they do not behave any differently than a first time buyer. • This can be attributed to the change in innovation and technology over a period of 4-5 years by the time when they change their cars. • Not much brand loyalty is displayed, and customers tend to browse as many as 6-7 cars across 3-4 brands before finalizing one • The number of alternatives considered remains the same for non-luxury and luxury cars
  • 9. Rural Vs Urban • Indian automobile customers go through repeat purchase, as such they do not behave any differently than a first time buyer. •Rural customers tend to opt for lesser number of options, when compared to the urban market. •Rural market still has issues with several parameters like point of service location and rugged roads. Many cars cannot handle that toughness. •A brand like Mahindra heavily caches in on that factor
  • 11. Choice of Rural Market • From the sales chart, it is clear that the 18 year old Bolero is giving a tough time to all the new entrants • All the factors discussed prior gave the Mahindra product a massive edge over other brands when it came to conquering the rural market.
  • 12. That would be my bolero 
  • 13. Urban Market examined • When it comes to urban buyers, an over whelming number of the buyers, of late seem to follow a trend of sticking to one brand • Brand loyalty, support of OEM’s , buy back options and most importantly easy financing options made available to the clients who are repeat buyers, by the company itself is one of the core reasons behind this paradigm shift.
  • 14. Gen X- Gen Y trends • Urbanized Gen X buyers, owning a premium hatchback, or an A3- sedan, costing between 6- 8 lakhs seems to be more experimenting with the brands • A sizable 40 percent of them seems to have considered more than 6 cars prior to purchase • In contrast, less than 20 percent of the Gen Y population has considered that many cars before purchase
  • 15. This is the market ecosport targets
  • 16. BRAND PERCEPTION Key Influencers • Consumers considered a number of brands but ended up making purchase from among 3-5 brands. • Looking on the brands considered by existing car owners, we can see that SUV owners have considered more number of brands as compared to van/minivan owners.
  • 17. Last Purchase Consideration By Vehicle Type • There are a number of factors that changes the initial plan of the consumers, there is a shift from what they initially considered and what they finally selected. • As there is only 13% people changing the considered model based upon price of the vehicle, which further intensifies the view that Indian consumers is price driven.
  • 18. Factors That Changes Initial Plan
  • 19. Last Purchase Consideration By Car Value • Based upon the responses, it was figured out that about 40% of consumers have considered only 3-4 brands from 2-12lakhs value segment. • Consumers have considered more number of brands while making a purchase at high price points.
  • 20. • Based upon the owners rating for their respective brands, maximum owners have rated there brands high in brand reputation and performance and handling followed by overall quality and safety. • Least points were given to the fuel efficiency and resale value. But as they are happy with what they have.
  • 21. CONCLUSION • The Indian car buyer comes across as a very rational person during the entire process, contrary to the popular notion of car buying being a very………..... emotional activity.
  • 22. • There are very practical reasons to buy a car - space, need of the family or to upgrade to a higher quality of vehicle. Once the need for a car is established, the buyer looks for quality of service, product reliability and re-sale value. • Given the factors, the potential buyer looks at several products, presumably at the same price point, and tends to make the final selection. This appears to be a deliberate and a detailed process.
  • 23. The lessons for the OEMs • It helps to appeal the rational side of the buyer. • While the brand itself and the perceptions around it are important, the buyer looks at the quality of the dealership for service, vehicle reliability and resale value to shortlist the brands. • The chance of almost all brands to get into the consideration of a buyer seems bright.
  • 24. • Consumers not complaining should not to be misunderstood to mean satisfaction and brand loyalty! Most of the consumers would tend to look at all possible options before making the next buying decision, at least, at the present moment. • While only a very small number of customers seem to be loyal to a brand, the population, however, seems to be growing. This would, therefore, suggest a need to revisit loyalty programs to make the ownership experience compelling.